TUTORIAL 4: EXCISE DUTY (ANSWER)

Question 1: Data for ACOH Inc., a liquor producer, in a tax month as follow
1. Import wine for sale in domestic market
 12o alcohol: 6,000 bottles at price of VND40,000. Import duty 20%.
 43o alcohol: 3,500 bottles at price of VND110,000. Import duty 25%.
2. Sale of wine with 12o alcohol: 5,000 bottles at before VAT price of VND100,000
3. Sale of win with 43o alcohol: 2,000 bottles at before-VAT price of VND300,000
4. 100 bottles of wine with 43o alcohol used for company’s conference and
reception.
Deductible input VAT is VND60 million.
Required: Determine Excise duty and VAT payable for ACOH Inc. in this tax period. VAT
is 10%, Excise duty is 25% for 12o alcohol, 50% for 43o alcohol.

Transactions Excise duty VAT

1. Importation *Excise duty paid at importation *VAT paid at importation will

will be deducted for the be deducted in full in the
amount of good sold during the period of importation
period.
Deductible input VAT:
Excise duty paid at importation:
 12o alcohol: 6,000 x
 12o alcohol: 6,000 x 400,000 x 1.2 x 1.25 x
40,000 x 1.2 x 25% = 10% = VND 36m
VND 72m
 43o alcohol: 3,500 x
 43o alcohol: 3,500 x 110,000 x 1.25 x 1.5 x
110,000 x 1.25 x 50% = 10% = VND 72,187,500
VND240,625,000

2. Sale 12o 100000 5000 x 100000 x 10% = VND

5000 × × 25 %=VND 100 m
1.25 50m

3. Sale 43o 300000 2000 00000 x

2000 × × 50 %=VND 200 m
1.5 10% = 60m

4. Internal use Excise duty = normal sale = Output VAT = 0 (Internal use for
biz purpose is exempt)
300000
×50 %=VND 10 m
1.5

End of period Deductible input excise duty: VAT payable = 50 + 60 – 36 –

72.875 – 60 = - 58.1875
 - 12o : 72 x 5,000/6,000 = 60m This amount will be deducted
against VAT payable of the next
- 43o : 240.625 x 2,100/3,500 =
period.
144.375m
Excise duty payable: 100 + 200
+ 10 – 60 – 144.375 = 105.625m

Question 2: In a tax period, SPEEDI Co. incurs the following data

1. Exportation: 100 16-seat cars at FOB price of VND460 million
2. Cars sold to a company in an EPZ: six 5-seat cars with cylinder capacity of 3,000
cubic cm. VAT-exclusive price at the gate of EPZ is VND640 million.
3. Domestic sales: 20 cars of 5-seat type with cylinder capacity of 3,000 cubic cm at
before-VAT price of VND672 million.
Total deductible input VAT is VND250 million.
Required: Determine excise duty and VAT payable by this company in the tax period.
SPEEDI Co. engages in car production and trading. All exports are supported with
sufficient documents. Excise duty applicable for 16-seat and 5-seat cars are 15% and
60% respectively. VAT is 10%.

Transactions Excise duty Output VAT

1. Exportation Non-excisable 0 (0%)

2. Cars sold to EPZ 6x 640/(1+60%) x 60% = 1,440m 6x 640m x 10% = 384m

6 Domestic sales 20 x 672/(1 + 60%) x 60% = 5,040m 20 x 672 x 10% = 1,344m

End of period Excise duty payable VAT payable

= 1,440m + 5,040m = 6,480m = 384+1344 – 250 =
1,478m

Question 3: CIGI - a tobacco company has the following data in a tax month
1. Purchased 10,000 kg of processed tobacco with before VAT price of 82,500
dongs per kg
2. Used all of the above processed tobacco to produce 500,000 packets of cigarette
3. Sale of cigarette: 400,000 packets with before VAT price of 9,900 dongs per
packet
No inventory of processed tobacco and cigarette at beginning of period
Required: determine excise duty payable and VAT payable of CIGI for the month

Transactions Excise duty VAT

1. Purchase Input excise duty paid Deductible input VAT

excisable material
= 10,000 x 82,500/(1 + 75%) x 75% = = 10,000 x 82,500 x 10% =
353,571,428.6 82,500,000

3. Sale of Output excise duty Output VAT =

cigarette
= 400,000 x 9,900/(1+75%) x 75% = 400,000 x 9,900 x 10% =
1,697,142,857 396m

End of period Deductible input excise duty VAT payable

= 353,571,428.6 x 400,000/500,000 = = 396m – 82.5m = 313.5m
282,857,143
Excise duty payable
= 1,697,142,857 – 282,857,143 =
1,414,285,714

Question 4: GOLD LID, a beer producer, incurs the following data for a period
1. Purchase of draft beer: 500,000 liters at before-VAT price of VND7,500. Company
uses the draft beer to produce 1,000,000 bottles of beer.
2. Exportation of bottled beer: 350,000 bottles at FOB price of VND10,000.
3. Selling 50,000 bottles at price of VND9,500 to a company in EPZ.
4. Selling 250,000 bottles at before-VAT price of VND9,500 to a trade company
which then exports according to a trade contract signed with a foreign company.
5. Domestic sales are 200,000 bottles at before VAT price of VND13,500.
6. Deductible input VAT of goods and services other than draft beer purchased
above is VND10 million.
Required: Determine the amount of excise duty and VAT payable by GOLD LID for the
tax month. There is no material in inventory at the beginning of tax month. Tax rates
applicable are 10% of VAT and 50% of excise duty. Exports are supported with sufficient
documents.

Transactions Excise duty VAT

1. Purchase of draft Input excise duty paid Deductible input VAT =
beer 500,000*7,500*10% = VND 375mil
= 500,000*7,500/(1+50%)*50%=
VND 1,250mil

2. Export beer Non-taxable Output VAT = 0 (0%)

3. Sale of beer to Non-excisable Output VAT = 0 (0%)

EPZ

4. Sale to trading Non-taxable Output VAT = 250,000*9,500*10% =

company for export VND 237.5mil
(exporter)

5. Domestic sales Output excise = Output VAT = 200,000*13,500*10%

200,000*13,500/(1+50%)*50% = = VND 270mil
VND 900mil

End of period Input excise duty is deductible Deductible input VAT = 10 mil
only for excisable sales during the
period.
Deductible input excise duty=
1,250*200,000/1,000,000=250 mil

Excise duty payable VAT payable=

= 900-250=650 mil 237.5+270-375-10=122.5 mil